Remuneration to the Board and senior executives

Principles for remuneration and benefits

A director’s fee is paid to the Chairman and members of the Board as decided by the Annual General Meeting. No director’s fee is paid to employees of the Group or to employee representatives. Remuneration for the President and CEO and other senior executives is made up of a base salary, variable remuneration, other benefits and a pension. Other senior executives are individuals who, together with the President and CEO, constitute Group management.

In 2016, Group management comprised four individuals, in addition to the President and CEO. They were Executive Vice President and CFO Per-Ola Holmström, President of Nolato Medical Johan Iveberg (as of 19/05/2016), President of Nolato Telecom Jörgen Karlsson and President of Nolato Industrial Johan Arvidsson.

 

Preparatory and decision-making procedure

The Board of Directors has appointed a Remuneration Committee, consisting of the Chairman of the Board and one other Board member. The committee has proposed, and the Board of Directors has approved, the current principles for variable remuneration. The committee has made decisions on all remuneration and benefits for the President and CEO, which have been presented to and approved by the Board. The committee has approved the remuneration of Group management.

 

Bonuses

Bonuses paid to the President and CEO and other senior executives are based on the outcome of profit and return on capital employed. The maximum outcome is 50% of base salary for the CEO and 40% for other senior executives. At the same time, the relevant profit centre must report positive earnings. In 2016, the outcome for the President and CEO was 5% of base salary (50) and for senior executives it was 1–17% of base salary (25–40).

Participants in the Series 1 Incentive Programme are offered the opportunity to receive a bonus payment corresponding to half of the participant’s option premium and the income tax charged on such bonus payment, provided that the participant’s employment at the company does not cease before three years have elapsed from 1 November 2016.

 

Incentive programmes

At an extraordinary general meeting on 5 December 2016, an issue was approved of a maximum of 798,000 warrants in three different series: 2016/2019 (Series 1), 2017/2020 (Series 2) and 2018/2021 (Series 3), with 266,000 warrants in each series giving the right to subscribe for as many B shares. Each warrant thus entitles the holder to subscribe for one (1) new B share. The price per warrant was set at SEK 7.40. The programme was offered to twenty individuals within Nolato’s management. The issue price for a B share in Series 1 is SEK 296.30. The maximum dilution effect of all of the incentive programme’s three series is expected to amount to a total of approximately 3% of share capital and 1.6% of votes (calculated based on the number of existing shares), assuming full subscription and full exercise of all warrants.